How to claim a new car on your taxes
2:28 pm PST December 31, 2014
The other deduction associated with a vehicle is any personal property tax that is assessed annually on the value of the automobile.
==>>> How to report Property Tax imposed on your personal use motor vehicle [note: personal use; and assuming the tax qualifies, see below]
Go to Personal Deductions and Credits - select "I'll Explore on my own!" - see the lengthy list of Deductions & Credits
Scroll down to "Cars and other Things You Own" and select "Car Registration Fees"
You must have knowledge of the amount of assessed fees and taxes that are in fact qualified [see below!] The popup list of states is incorrect as well as out of date relative to deductiblity of Property Tax.
Enter Make of Vehicle, Model, and even suggest you enter year; then amount of actual deductible property tax.
Read below to understand what is meant by a qualifying deductible property tax on your vehicle. Registation fees in and of themselves are not. The rules are spelled out below.
For Motor Vehicle Excise Tax - a/k/a Property Tax in most cases:
THE IRS allows as a deduction on Schedule A Itemized Deductions "Other Taxes" Line 8 those taxes that are assessed on the value of property [so called "ad valorem"]. Some states have a registration fee that has no tax included in it; some states have a fee with both fixed components and variable components. Of these states with variable registration fees, either assessed in one bill or assessed
in several bills, IF one of the fees is based on the value of the vehicle, that specific portion of the registration fee, frequently called either a "property tax" or an "excise tax" is deductible. It varies from state to state and in some state even within county.
You need to look at the registration fees on the bill that you paid to know.
The "personal property tax" which may be assessed by the state, county or municipality imposing a fee which is based on the value of your vehicle - this is critical that it be a tax known as "ad valorem" - on value- Some such taxes are commonly called "excise tax." Registration fees may, state depending, incorporate such a tax. If you have such a value-based tax it is filed as Itemized Deductions Taxes - Personal Property Tax. Moreover, the tax, excise or whatever it is called, must be assessed annually to be deductible.
See below if you live in a state where some or all of the "Excise Tax" or "Property Tax" or a portion of the registration fees are deductible under Personal Property Tax
1. The fee is an ad valorem tax. Ad valorem tax is a fee based on a percentage of the car's value.
2. The fee is imposed on an annual basis.
3. The fee is imposed on personal property.
4. These are the states where this is applicable and you may be able to deduct as an itemized deduction the personal property tax.Source: ttlc.intuit.com